TaxTMI 
TaxTMI 
2025 (7) TMI 2029
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....case for AY 2012-13 onwards, was reversed by the Ld.CIT(A); and the Revenue's appeals against the Ld CIT(A)'s orders were dismissed by this Tribunal for AY 2012-13 by order dated 03.01.2024 in ITA No. 1704/Chny/2018 in the case of DCIT v. M/s. Olympia Tech Park (Chennai) Pvt. Ltd., [successor of M/s. Khivraj Tech Park]. The grounds raised by the Revenue for captioned AY 2016-17 are reproduced as under: 1. The order of the learned Commissioner of Income Tax (Appeals) in ITA. ITBA/NFAC/S/250/24-25/1072589855(1) dt. 27.01.2025 for the Assessment year 2016-17 is erroneous in law, facts and circumstances of the case. 2. The Ld. CIT (A) erred in deleting the disallowance u/s 80IA(4)(iii) made by the assessing officer to the tune of Rs. 41.29 crores. The Ld. CIT (A) ought to have appreciated that the constitution of the assessee firm(Transferee) was after March 2011, whereas the Industrial Park Scheme(IPS) 2002 and IPS 2008 provides that deduction is allowable only to those undertakings which were notified between the period 01.04.1997 and 31.03.2011 respectively. 3. The Ld. CIT (A) failed to note that the Industrial Park Scheme 2008, superceded the ea....
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....llowable only to those undertakings which were notified between the period 1.4.1997 and 31.03.2011. 2.3 The Id CIT (A) failed to note that as per Industrial Park Scheme, 2008 superceded the earlier schemes, whereby both the transferor and transferee entities have to be notified under the scheme to become eligible for claiming the deduction ; the transferor Industrial Park was notified as per IPS, 2002, whereas the transferee entity was not notified under any of the two scheme~ 3.1 The Id CIT (A) erred in directing the AO to allow deduction u/ s 80I(4)(iii) on the entire income of the undertaking, including the income attributable to the development of the industrial park such as rent, operation and maintenance and fit out. 3.2 The ld. CIT (A) failed to note that as per the proviso to Sec. 80IA(4)(iii), only the transfer of operation and maintenance of the industrial park has to be considered for the deduction in the hands of the transferee and not the entire income due to transfer of the industrial park itself lock stock and barrel. 3.3 The Id CIT (A) ought to have noted that three categories of business activities have been mentioned u/s 80IA(4)....
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....y and during the course of assessment proceedings, the Assessing Officer called upon the assessee to furnish necessary evidences to justify deduction claimed u/s. 80IA(4)(iii) of the Act. In response, the assessee submitted that the company, M/s. Khivraj Tech Park Pvt Ltd., is engaged in developing, operating and maintenance of the Industrial parks. The industrial park developed by the company was duly approved by the Department of Industrial Policy and Promotion (DIPP) under Ministry of Commerce and Industry vide notification no. 15/12/2005-IP&ID, dated 25.07.2016. The said industrial park was also notified by the CBDT vide notification no. 331/2006 dated 30.11.2006, in accordance with the Industrial Park Scheme, 2002. The assessee further stated that, during the financial year relevant to assessment year 2012-13, the company along with four other companies formed a partnership firm under name and style of 'M/s. Khivraj Tech Park' and the company M/s. Khivraj Tech Park Pvt Ltd has transferred the industrial park as its capital contribution as a going concern. The partnership firm has been subsequently converted into a company under the name and style of 'M/s. Olympia Tech Park (Ch....
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....rom house property' and income received towards operation and maintenance under the head 'income from other source'. The Assessing Officer had also denied deduction claimed u/s. 80IA(4)(iii) of the Act to interest received from bank and assessed under the head income from other source. 5. Being aggrieved by the assessment order, the assessee preferred appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee has challenged the findings of the Assessing Officer in denying deduction u/s. 80IA(4) of the Act, on the ground that as per provisions of section 80IA(4)(iii) of the Act, the successor company is eligible to claim deduction for the remaining period and the same has been recognized by the Industrial Park Scheme, 2002. The ld. CIT(A), after considering relevant submissions of the assessee and also taken note of relevant facts observed that, the assessee is eligible for deduction u/s. 80IA(4) of the Act, for the remaining period because the industrial park developed by the assessee company was approved by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industries, Government of India and was also duly notified by the CBDT. The ld. CIT(....
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....ansfer of operation and maintenance of the industrial park has to be considered for the deduction in the hands of the transferee undertaking and not the entire income. The ld. DR further submitted that, the ld. CIT (A) failed to appreciate the fact that provisions of section 80IA(4)(iii) of the Act, provides deduction for different kinds of activities and as such, if the assessee undertakes development activity, deduction can be allowed only to the extent of income generated from said activity and if the assessee undertakes operation and maintenance, then deduction should be allowed only to income generated from said activity. The ld. DR further submitted that, the ld. CIT (A) erred in allowing deduction towards interest income earned from bank without appreciating fact that interest income from bank is not derived from industrial undertaking, which is engaged in the business of development and maintenance of industrial park. The ld. CIT (A) also failed to note that the Assessing Officer has rightly treated the appellant firm as AOP, because the Memorandum and Articles of Association of the partner companies did not authorize to enter into partnership firm and that while subsequent....
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....ir order should be upheld. 9. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The fact with regard to the industrial park developed by M/s. Khivraj Tech Park Pvt Ltd was duly approved by the Department of Policy and Promotion, Ministry of Commerce and Industries, Government of India vide notification no. 15/12/2005-IP&ID, dated 25.07.2016 and was also duly notified by the CBDT vide notification no. 331/2006, dated 30.11.2006, in accordance with Industrial Park Scheme, 2002 is not disputed by the Assessing Officer. In fact, the Assessing Officer categorically admitted that the industrial park developed by the assessee was approved under the Industrial Park Scheme, 2002. It is also not in dispute that the assessee has claimed deduction u/s. 80IA(4) of the Act from assessment year 2011-12 and the same has been denied by the Assessing Officer. On appeal, ld. CIT (A) allowed deduction u/s. 80IA(4) of the Act and the same has been approved by the Tribunal. Although the department filed an appeal before the Hon'ble High Court of Madras, but subsequently the department had withdrawn the appeal filed before the....
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....feror undertaking is duly notified, whereas the transferee undertaking is not notified in any of the section. In our considered view, the Assessing Officer is once again failed to understand the provisions of section 80IA(4)(iii) of the Act, in right perspective because as we have stated in earlier part of this order transfer u/s. 80IA(4)(iii) of the Act is qua the undertaking and not qua the assessee. The undertaking owned by the transferor is same undertaking owned by the transferee. It is not a case of the department that the undertaking and industrial park transferred by the transferor is not notified. Further, as per Paragraph 9(4) of the Industrial Park Scheme, 2002 and Paragraph 10 of CBDT notification, if there is a transfer of undertaking, the transferor and transferee should jointly intimate to the DIPP. The said compliance was duly complied by the assessee vide letter dated 12.04.2011 and DIPP as acknowledged the transfer vide letter dated 01.02.2012 with a copy to the CBDT. In our considered view said compliance is sufficient for the transferee undertaking to claim deduction u/s. 80IA(4)(iii) of the Act for remaining period. This fact is further strengthened by Circular....
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....o derived from industrial undertaking by development, operation and maintenance of industrial park. It was the contention of the revenue that the only income derived from operation and maintenance qualify for deduction and interest income earned out of deposits cannot form part of eligible income in context of section 80IA(4) of the Act. Although, in principle we agree with the contention of the revenue that interest income earned from fixed deposits kept with bank cannot be considered as income derived from industrial undertaking, but facts of the present case has to seen in light of the conditions for keeping mandatory security deposit with the banks. As per the Ld. Counsel for the assessee, the appellant company has availed loan from consortium of team of bank and as per agreement with banks, the company should maintain a sum of Rs. 15 crores in Debts Service Reserve Account (DSRA) under lien to lenders to guard against account any temporary mismatch in cash flows for repayment of loan installments. This Debt Service Reserve to be maintained with one of the lenders. Accordingly, the assessee has kept fixed deposits of Rs. 15 crores in two banks and earned interest. The....